MATTER : Inheritance (Family Dependants Provision) Act 1972

The Estate of Wlodymyr Kowal late of 18 Glengariff Drive Floreat (Dec)

NATALIA ROXANA LANGLANDS AS EXECUTOR OF THE ESTATE OF WLODYMYR KOWAL

DANIEL ROBERT LANGLANDS AS EXECUTOR OF THE ESTATE OF WLODYMYR KOWAL

Inheritance (Family and Dependants Provision) Act 1972 (WA) - Settlement - Compromise of action by person under disability - Application for approval of compromise

Inheritance (Family and Dependants Provision) Act 1972 (WA), s 6(1)

1 LE MIERE J: The third defendant is a person under disability. On 14 June 2007 the Public Trustee was appointed limited administrator of the estate of the third defendant with the function to bring and defend actions, suits and other legal proceedings in the name of the third defendant.

2 On 7 November 2005 the plaintiff filed an originating summons claiming that the will of the late Dr Wlodymyr Kowal is not such as to make or allow adequate provision for the proper maintenance, support, education or advancement in life of the plaintiff and claiming pursuant to s 6(1) of the Inheritance (Family and Dependants Provision) Act 1972 (WA) (the Inheritance Act) that the court order such provision as the court thinks fit out of the estate of the deceased for the proper maintenance, support, education or advancement in life of the plaintiff.

3 The plaintiff was born on 23 August 1952 and is the youngest of three children of the marriage of the deceased and Mrs Wira Kowal, his second wife, who died on 10 April 1989. The other two children of that marriage are the second defendant who was born on 27 September 1946 and the third defendant who was born on 28 April 1950. The deceased had a son from an earlier marriage who died after the commencement of these proceedings.

4 The deceased made a will dated 20 March 1998. Under his will the deceased left the residue of his estate to be divided into three equal shares. The plaintiff and the second defendant each received one undivided share absolutely. The third share is given to the executors to hold for the benefit of the third and fourth defendant and also any other children of the third defendant. The fourth defendant is the son of the third defendant, who has no other children. The trusts contained in the will provide for the trustees, in their absolute discretion, to distribute income from the trust for a period of 20 years from the date of death of the deceased to the third defendant and his children, and at the expiration of that period to hold such capital and accumulated income for the third defendant and any of his children who are alive at that time in such proportions and shares as the trustees in their absolute discretion see fit.

5 A number of affidavits have been filed in these proceedings. A lot of the evidence has been objected to and the objections have not been dealt with.

6 The solicitors for the first defendants, the executors of the estate of the deceased, provided Dr Peter MacMillan of counsel a statement of assets and liabilities of the estate dated 6 February 2008. The statement reveals, taking into account anticipated tax liabilities for the estate, a net asset value in the sum of approximately $1,175,000.

7 The third defendant is not named as a plaintiff in these proceedings; however, in his affidavit the third defendant put forward a claim under the Act in his own right. There is evidence that the third defendant suffers from a psychiatric condition and that he is not in a position to earn his own living. The evidence is further to the effect that although he has a psychiatric condition he is able to live independently in the community. The third defendant has no assets. He lives in a boarding house and receives social security benefits.

8 There have been a number of mediation conferences. The fifth mediation between the parties was held on 8 February 2008. The matter was settled, subject to court approval, on the basis that:

(a) the plaintiff receives from the estate of the deceased the sum of $480,000 inclusive of costs;

(b) the second defendant receives the sum of $135,000 from the estate of the deceased inclusive of costs;

(c) the third defendant receives the sum of $546,000 from the estate of the deceased inclusive of costs;

(d) the third defendant is to pay the legal costs of the fourth defendant, fixed in the sum of $15,000.

(e) any surplus from the estate of the deceased is to be divided equally between the plaintiff, the second and third defendants;

(f) on approval of the compromise, the proceedings are to be dismissed with no order as to costs;

(g) the application for approval of compromise is to be made by the third defendant.

9 The funds which it is proposed the third defendant should receive from the estate of the deceased are to be the subject of a trust. The terms of the trust are set out in the opinion of Dr MacMillan of counsel in an opinion as to proposed compromise of the proceedings dated 18 February 2008 and annexed to the affidavit of Shaun William Conlin sworn 26 February 2008 in support of the application to compromise.

10 By this application the Public Trustee as next friend of the third defendant seeks the approval of the court to the compromise settlement. Before approving the compromise the court must be satisfied that it will be for the benefit of the third defendant. That does not mean that the court is in effect to hear the application as if it were determining the originating summons and then to give or to withhold its approval by comparing the offer with the judgment which it would have given on the substantive hearing. What the court is called upon to do is to satisfy itself that all the facts relevant to the third defendant's claim have been brought together and considered by his legal advisers and that the settlement is supported by the opinion of independent counsel. The court must itself consider the opinion given and the reasons for it. If having done that it appears that all aspects of the case have received proper consideration the court should be slow to disagree with the opinion particularly upon such a matter as an Inheritance Act application. The court should be aware of the risks of litigation in an area in which reasonable people can reasonably reach different conclusions and hence slow to force the person under disability to take a risk which the court is unable to underwrite. It should, too, satisfy itself that the opinion of counsel has been considered and understood by the guardian and next friend of the person under disability and it should give proper weight to the fact that the next friend wishes to accept the settlement: see Sosa v Carter [1978] WAR 123.

11 Having approached the application in this way I have reached the conclusion that the compromise settlement is for the benefit of the third defendant and the court should approve the settlement in the terms set out in the third defendant's chamber summons for approval to compromise pursuant to O 70 r 10 of the Rules of the Supreme Court 1971 (WA). There will be orders accordingly.